Petter Lundborg is a professor of economics at Lund University in Sweden. Petter.Lundborgnek.lu.se. Paul Nystedt is an associate professor of economics at Linköping University in Sweden. Paul.Nystedtliu
.se. Dan- Olof Rooth is a professor of economics at Linnaeus University in Sweden. Dan- Olof.Roothlnu .se. The authors thank two anonymous referees and seminar participants at Linnaeus University, Lund Uni-
versity, IFAU Uppsala University, at the ESPE conference in Seville and at the EALE meeting in London for useful comments and suggestions. Research grants from the Centre for Economic Demography at Lund
University and the Swedish Council for Working Life and Social Research are gratefully acknowledged. The data in this article belong to Statistics Sweden. Scholars seeking to replicate this work may consult
Dan- Olof Rooth, Linnaeus University, 39182 Kalmar, Sweden, beginning August 2014 through July 2017. [Submitted October 2011; accepted December 2012]
ISSN 0022- 166X E- ISSN 1548- 8004 © 2014 by the Board of Regents of the University of Wisconsin System
T H E J O U R N A L O F H U M A N R E S O U R C E S • 49 • 1
Height and Earnings: The Role of Cognitive and Noncognitive Skills
Petter Lundborg Paul Nystedt
Dan- Olof Rooth
A B S T R A C T
We use large- scale register data on 450,000 Swedish males who underwent mandatory military enlistment at age 18, and a subsample of 150,000
siblings, to examine why tall people earn more. We show the importance of both cognitive and noncognitive skills, as well as family background and
muscular strength for the height- earnings relationship. In addition, we show that a substantial height premium remains after these factors have been
accounted for, which originates from very short people having low earnings. This is mostly explained by the sorting of short people into low- paid
occupations, which may indicate discrimination by stature.
I. Introduction
The positive association between height and social status is one of the most consistent fi ndings in the social sciences. It has been obtained using both
18- century data from Germany and using recent U.S. and U.K. data Komlos 1990; Per- sico, Postlewaite, and Silverman 2004; Case and Paxson 2008a; Steckel 2009. In de-
veloping countries, where work tasks are more manual and physically demanding, this association has been attributed to greater physical strength accompanying height for
example, Steckel 1995; Thomas and Strauss 1997. For the Western world, where fewer jobs are physically demanding, it has been suggested that the height- earnings associa-
tion arises because short people are being discriminated against but two recent studies, Persico, Postlewaite, and Silverman 2004 and Case and Paxson 2008a, attribute the
association between height and earnings to mental skills associated with height.
1
Despite using the same data source, the two studies reach different conclusions concerning the nature of the underlying mechanisms at work, however. Case and
Paxson 2008a emphasize the role of cognitive skills whereas Persico, Postlewaite, and Silverman 2004 stress the importance of noncognitive or social skills. In their
analysis of data from the United Kingdom and United States National Child Develop- ment Study, NCDS, and National Longitudinal Survey of Youth, NLSY, respectively,
Persico, Postlewaite, and Silverman 2004 fi nd that teen height essentially explains the association between adult height and hourly wages among white men. In addition,
they show that even if cognitive test scores in childhood are correlated with adult earn- ings, these scores do not affect the magnitude of the association between height and
earnings. Instead, they argue that the link between teen height and later life earnings runs via participation in activities that build social skills during adolescence. From
this perspective, noncognitive skill can be viewed as a mediating factor in the height- earnings relationship as it results from social processes in which height in youth infl u-
ences its development.
Case and Paxson 2008a use wider inclusion criteria and argue that height growth and cognitive development during childhood are subject to common environmental
and nutritional circumstances. Accordingly, the association between height and earn- ings does not refl ect a causal effect of height, but rather that height is correlated with
cognitive ability via some underlying third factor affecting both height and earnings. They fi nd that neglect of controlling for cognitive ability substantially biases the esti-
mate for height in the earnings regression upwards.
2
In this paper, we provide new evidence on why tall people earn more. We contrib- ute to the literature by jointly analyzing the hypotheses offered by Case and Paxson
2008a and Persico, Postlewaite, and Silverman 2004 on the role of cognitive and noncognitive skills. For this purpose, we exploit data on an unusually large sample
of 450,000 Swedish males enlisting for the military between 1984 and 1997. Besides including high- quality composite measures of both cognitive and noncognitive skills,
the data include measured height at age 18 and register- based data on adult earnings, which should be more reliable than information obtained from surveys. Because en-
listment was mandatory for all males at age 18 during the study period, our data also have an extraordinary degree of representativeness.
In addition, we examine the role that both observed and unobserved family back- ground plays for the relation between height and earnings. Part of the association
between height and earnings may simply refl ect that tall people come from advan- taged backgrounds but the previous literature has not been able to fully address this.
We therefore exploit data on a large sample of 145,000 sibling brothers who enlisted for the military. As a further contribution, we investigate the importance of muscular
1. Other studies confi rm the positive association between height and labor market success, but commonly group height into a few distinct categories and or are based on rather few observations, which make com-
parisons diffi cult Loh 1993; Hamermesh and Biddle 1994; Harper 2000; Behrman and Rosenzweig 2004. 2. In recent work, Schick and Steckel 2010 use the NCDS and show that, taken separately, the incorpora-
tion of cognitive and noncognitive skills reduces the unconditional height- earnings association by about 40 percent each whereas, taken together, they reduce it by about two- thirds.
strength. While this factor has not been considered in the economics of height litera- ture to date, we argue there are reasons to believe it could still be of importance for the
height- earnings relationship also in the western world. Finally, we relax the assumption of linearity in the relationship between height and
earnings. By estimating models with centimeter fi xed- effects and piecewise- linear spline models, we are able to analyze whether any height- earnings relationship that
remains after accounting for control variables and mediating factors could refl ect discrimination against short people or, correspondingly, preferential treatment of tall
people. We also investigate the extent to which any such remaining height premium refl ects sorting of short people into low- paid occupations.
Our results demonstrate a substantial association between height and earnings also in a country such as Sweden, with universal healthcare coverage and small health and
income inequalities. We then fi nd that half of this raw association is explained by tall people coming from advantaged family backgrounds and having higher cognitive test
scores. While this provides some support for the fi ndings of Case and Paxson 2008a, we then also show the importance of noncognitive skills. Arguing that noncognitive
skills should be thought of as a mediating factor in the height- earnings relationship, we fi nd this type of skill to explain one fi fth of the height premium, lending some sup-
port also to the hypothesis put forward by Persico, Postlewaite, and Silverman 2004. When we also add muscle strength to our analysis, the magnitude of the height-
earnings relationship is further weakened.
Although inclusion of our control and mediating variables reduces the raw associa- tion between height and earnings by as much as three- quarters, we fi nd that a signifi -
cant relationship between height and earnings remains. Relaxing the assumption of linearity in the height- earnings relationship shows that this remaining height- earnings
association originates from very short people having low earnings. This could be in- dicative of discrimination of short people on the labor market, although we cannot
rule out that it instead is a result of some, by us unobserved, productivity enhanc- ing trait being associated with height. Irrespective of the mechanism, we show that
this remaining ”shortness penalty” is explained by short people sorting into low- paid occupations.
This paper is organized as follows. Section II outlines a basic conceptual and em- pirical framework and discusses how cognitive and noncognitive skills as well as
muscular strength may be linked to height in late adolescence, thereby potentially infl uencing the association between height and earnings. In Section III we describe our
data and provide some descriptive statistics. Our results are presented in Section IV, whereas Section V concludes.
II. Conceptual Framework
